Promised investment in skills training has been questioned after FE Week discovered £125 million of FE funding has been delayed by at least a year.

The Conservative Party manifesto pledged a new National Skills Fund (NSF) with £500 million being made available in each of the next five years in England from 2021/22, but last month’s spending review only committed three-quarters of that amount for next year.

The Department for Education has now confirmed that just £375 million of the promised £500 million will be used in 2021/22, following a reprioritisation of funds to “support the government’s response to Covid-19”.

The DfE did, however, make clear that the £125 million underspend will be used as part of the National Skills Fund in future years, and it remains committed to spending the full £2.5 billion.

But it seems there are even questions over the £2.5 billion figure, as £50 million of the dedicated £375 million for next year has been allocated to a capital budget.

Shadow skills minister Toby Perkins was shocked to hear the spending delay decision, saying it was a “remarkable thing at a time when the need for this money is greater than ever before” in the face of Covid-19.

He told FE Week: “There is a particular need for this funding at this moment because there are huge numbers of people who are being laid off in one sector who need to be retrained in new sectors. We have got fast-rising youth unemployment and there is a real need for investment in skills.

“The government rhetoric acknowledges that but their actual spending commitments are even less than what they committed to in their manifesto a year ago, long before anybody had ever heard of coronavirus.”

Policies that the NSF will be used to fund in future years are not yet known, as the DfE is yet to launch its promised consultation.

Of the NSF funding being used in 2021/22, £95 million will fund the prime minister’s level 3 entitlement in his ‘lifetime skills guarantee’, and £43 million has been set aside to expand the employer-led boot camp training model.

Meanwhile, £127 million will be used to continue the chancellor Rishi Sunak’s summer Plan for Jobs, including funding for traineeships, sector-based work academy placements and the National Careers Service.

And £110 million, including £50 million of capital investment, will be used to “drive up higher technical provision in support of the future rollout of a Flexible Loan Entitlement to test and develop innovative models for local collaboration between skills providers and employers”.

When FE Week asked why the NSF was being used to fund capital investment rather than its capital spending budget, the DfE would only say the decision was “taken as part of the spending review”.

University and College Union head of further education Andrew Harden echoed Perkins’ concern about the delay to NSF spending in 2021/22.

“Questions must be asked as to why we yet again see an underspend on a key government policy designed to address a chronic skills shortage when there is a looming need to re-equip the nation’s workforce for a post-Covid-19 economy,” he said.

Harden added that the funding could, for example, be used to fund a college staff pay rise in an effort to rebuild further education’s capacity to deliver the courses needed.

Last week, the Association of Colleges recommended its members give staff a one per cent pay rise owing to a lack of government investment – a decision that outraged trade unions.

Commenting on the NSF, AoC deputy chief executive Julian Gravatt said: “The extra money in the spending review for 16-to-18 education, for skills and for capital is a good start. With a lack of details or allocations yet, colleges won’t be able to make firm spending decisions, including on pay, until this happens.

“It would be useful to know where the £125 million top-sliced from the skills fund has gone. The £375 million allocated for 2021/22 will be a useful addition to the £2 billion spent on adult education and apprenticeships but it’s worth noting the Institute for Fiscal Studies’ estimate that spending halved in the last decade, so there is still some way to go to reach the levels needed to catch up.”

He added: “The need for capital investment is still very real – but there is a risk that Treasury and DfE have divided it up among a lot of budgets.”

The DfE would not be drawn on where the £125 million has been reprioritised to.